Australian Property News
Building forecast to grow for first time in seven years
Posted on Friday, November 21 2008 at 5:37 PM
Construction of residential properties will increase next year, according to BIS Shrapnel.
It has predicted the building of new homes in Australia will rise by 10 per cent, the first calendar year it has grown since 2002.
As such, residential construction is expected to be a key support for the national economy during 2009.
Based on the number of new dwellings constructed in 2001/02 as a result of the March 2001 additional $7000 First Home Owner Grant, BIS Shrapnel senior economist Jason Anderson expects there will be a pull forward in detached housing demand of approximately 11,000 dwellings in 2009.
“Monetary and fiscal policy are now firmly behind the housing sector,” he says.
“In some states, additional temporary grants will raise the amount of the First Home Owner Scheme even further.”
According to Anderson the First Home Owner Boost scheme should be extended until at least December 31 next year.
He says it would help to alleviate the current rental crisis by improving the funding availability for apartment development in the second half of 2009.
There is likely to be a reduced number of affordable apartments on the market over the next six months, Anderson says.
As it stands, he says the impact of the Boost scheme will be nearly totally concentrated on new detached houses.
“Given the current difficulties for developers to get finance for medium or high density unit/apartment development, we do not expect them to be in a position to schedule additional construction, even if they do see increased sales to first homebuyers,” he says.
“The First Home Owner Boost Scheme is scheduled to end on June 30, 2009, and it will be difficult for many projects to resolve financing issues over the next few months.”
Anderson says using more of the budget surplus to extend the Boost scheme will have greater economic benefits than tax cuts, because tax cuts can be saved rather than spent.
“Alleviating housing shortages will limit growth in rents which, if nothing is done, are forecast to increase by 10 per cent in 2009, up from 8 per cent in 2008,” he says.
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